FBR imposes withholding Tax on wedding events amid revenue shortfall
The Federal Board of Revenue (FBR) has introduced a 10% withholding tax on wedding events, a move aimed at enhancing tax collection in the sector. Wedding hall owners have announced that they will implement the tax on all upcoming ceremonies, including bookings for events at their venues.
The decision was finalized during a meeting between FBR officials and representatives of the Wedding Halls Association. Rana Raees, President of the Wedding Halls Association, stated, “This tax is part of directives issued by the FBR to improve tax compliance and increase revenue from the sector.”
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The new measure comes at a time when the FBR is facing a significant revenue shortfall. For November 2024, the tax authority collected Rs855 billion, falling short of its Rs1,003 billion target by Rs149 billion. Cumulative collections for the first five months of FY2024-25 have reached Rs4.3 trillion, but the agency still faces the challenge of achieving its Rs6.009 trillion target by December 31, 2024, as stipulated under the IMF program. To meet this goal, the FBR must collect Rs1.71 trillion in December.
The revenue deficit has already surpassed earlier projections. Initial estimates suggested a shortfall of Rs321 billion for the first half of the fiscal year (July-December), but actual figures indicate the shortfall has grown to Rs338 billion within five months.
This withholding tax on wedding events is one of several steps being taken by the FBR to bridge the widening revenue gap. The tax authority continues to explore additional avenues to meet its financial obligations and stabilize the national economy.
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